Fundamental analysis typically groups financial ratios into these categories:

**1. Liquidity ratios** — ability to meet short-term obligations

- Current ratio, quick ratio, cash ratio

**2. Solvency/leverage ratios** — long-term debt capacity and financial risk

- Debt-to-equity, debt-to-assets, interest coverage ratio

**3. Profitability ratios** — earnings performance

- Gross margin, operating margin, net margin, ROE, ROA, ROIC

**4. Efficiency (activity) ratios** — how well assets are used

- Inventory turnover, receivables turnover, asset turnover, days sales outstanding

**5. Valuation (market) ratios** — how the market prices the stock relative to fundamentals

- P/E, P/B, P/S, EV/EBITDA, dividend yield, PEG ratio

**6. Growth ratios** — trends over time

- Revenue growth, EPS growth, earnings growth rate

**7. Cash flow ratios** — quality of earnings and cash generation

- Operating cash flow ratio, free cash flow yield, cash flow to debt

Analysts usually combine several of these groups rather than looking at one in isolation — for example, pairing profitability with leverage to see if high returns are coming from excessive debt, or checking valuation against growth to judge if a stock is fairly priced. Want me to go deeper on any one group, or walk through how to apply these to a specific company?

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